There are two categories of financial input that you may wish to undertake with Red Sky Farm Performance Analysis. One is called ‘Actual’ and this should represent completed financial years where the accountancy data is fully reconciled. The second category is called ‘Budget Scenario’ and this would include budgets for the present financial year and any number of scenarios for future years. This could also include completed years where milk price, feed price or other factors have been altered to assess their effect on farm performance.
Only ‘Actual’ years are included in the benchmark calculations and these should normally be entered with reference to a set of annual accounts. One of the entry areas in Red Sky involves transcribing all the entries from the Balance Sheet and Profit & Loss Statement into the program. We have tried to list all likely entries from either a New Zealand or Australian set of accounts and as a result this should be a simple process.
To create a ‘Budget Scenario’ then you could either enter numbers from a previously prepared budget or use data already entered in Red Sky to assist you. There is both a Copy and Rollover function. These allow you to copy or rollover previous year’s data that has been entered either from the same farm or from a benchmark farm. The Rollover function includes a scaling function that allows you to alter both farm area and stock numbers, which then results in Red Sky scaling most financial entries for these factors.
There is also a need to enter realistic market and average medium term values for land and livestock as these are often not accurately represented in a set of accounts. Similarly the value of vehicles, plant and machinery may vary from book values and there is a place to enter an accurate value for these. Shares and other assets can also be entered at full market value.
Adjustments then need to be made for a number of factors. Where management and other staff time is not being directly remunerated in the accounts of the business then this needs to be assessed. In addition there are often adjustments required for either accelerated depreciation or to reconsign annual expenses that provide a benefit over a number of years.
Livestock numbers then need to be entered at the start and at the end of the year so that changes to these can be assessed when calculating both profit and changes to nett worth. This exercise should also be undertaken for supplements on hand at the start and at the end of the year, and there are points of entry for this.
Once this has been completed then the majority of the reports are available for calculation and printing. To take full advantage of the business planning potential of Red Sky there is additional information required so that a number of physical ratios can be calculated in regards to animal performance, pasture dry matter production, cost of feed and staff performance.
To assist with the collection of data from farmers you can print off a hard copy of entry forms by going to the Data Entry tab on this website. There is a selection of forms depending on farming type and whether only financial reports or financial and physical reports are to be completed.
Under the Checklists & Definitions tab there is a list of the definitions for all terms used in Red Sky Farm Performance Analysis. In addition there is a list of the Key Performance Indicators for each farming type and a description of how these are calculated, as well as some suggested coding for monthly recording of expenditure on farms.